American Petro-Hunter Updates Progress on 15,000 Acre Mississippi Lime Land Package in Rice and Reno Counties, Kansas
American Petro-Hunter Updates Progress on 15,000 Acre Mississippi Lime Land Package in Rice and Reno Counties, Kansas Acquisition
WICHITA, KS -- (Marketwired) -- 10/09/13 -- American Petro-Hunter, Inc. (OTCBB: AAPH) ("American Petro-Hunter" or the "Company") today is pleased to update stakeholders on the progress of the transaction for the acquisition of a land package located in central Kansas. For future reference, the Company has designated the name for the lands as the "Kansas Mississippi-Osage Project." The land play is envisioned to become our primary development project and "core" asset for the future. The agreements cover an Area of Mutual Interest, (A.M.I.) totaling 15,000 acres located in Rice and Reno Counties, Kansas.
The Company and the vendor have augmented and renegotiated terms announced on August 7th. The new terms of the agreement signed with the vendor, Warpaint Kansas, LP, call for the Company to drill to earn its interests requiring the Company to spend 100% of the drilling, completion and infrastructure costs through the tanks on horizontal Mississippi-Osage wells giving Warpaint a 20% carry, for the Company to earn its 80% Working Interest (W.I.).
The expenditure commitment and obligation totals $5.4 million to the benefit of Warpaint, which will be fully paid after drilling approximately 10 wells. The acreage, if fully developed on a 640 acre unit basis, could potentially support the drilling of a minimum of 23 wells. The Company will earn its 80% W.I. on each 640 acre unit drilled, until it ultimately will have ownership of 15,000 gross, or 12,000 net acres. The Company and Warpaint Kansas, LP expect to execute formal Purchase and sale Agreements and Joint Operating Agreements this week.
The play carries an overall 81.25% Net Revenue Interest (N.R.I.). Of significance, American Petro Hunter will be acting as the operator of the project. The Company and Warpaint have structured a timely development of a new well every ninety (90) days, allowing sufficient time to drill, complete and evaluate the well prior to proceeding to the next planned location. The Company plans on beginning the permitting process for the first well immediately, and has engineered and proposed four (4) horizontal locations to begin the project development.
The acreage is located in the heart of lands undergoing horizontal well development of the Mississippian "Osage" chert by several major companies.
The geology of the leases shows the depth of the Mississippian "Osage" at 3,300 feet with thickness within the prospective area ranging between 40' to 50'. The formation has suitable frack barriers above and below the Mississippian "Osage" in the prospect area amenable to multi-stage frack completions similar to other company operations in the area. As the only potential water to be disposed of will be from the Mississippian "Osage" formation pay zone, this may greatly reduce the number of potential water disposal facilities required and ultimately reduce operating costs. The uniform rock characteristic of the Mississippian "Osage" leads us to believe that this may be an economically repeatable "play" and compares well to regional analog production. There are additional secondary objective targets located above the Mississippi "Osage" in the Lansing and Kansas City Formations.
The Mississippian "Osage" chert play was kicked off in 2012 by the drilling of the Unit Corp #1-21H Overall (section 21-25S-10W) drilled to a total depth of 8,115' and was completed in June 2012. Cumulative production for this well during the first five months has been reported as 30,226 BO and 20,375 MCFG. (201 BOPD, 135 MCFGPD). American Petro-Hunter is targeting a potential of 200 BPD from the wells for initial going forward planning.
Since the completion of the test outlined above, there have been 30 horizontal locations filed for permits. Currently there are 12 producing horizontal wells, 11 undergoing drilling and completion, and an additional 20 wells permitted in the area.
About American Petro-Hunter, Inc. (OTCBB: AAPH) American Petro-Hunter is an exploration and production (E&P) company focused on the acquisition and horizontal development of the Mississippi Lime and Woodford oil formations located in Oklahoma and Kansas. The Company operates from its offices in Wichita, Kansas. Visit us at: www.americanpetrohunter.com
Notice Regarding Forward-Looking Statements This news release contains "forward-looking statements" as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, scope and type of consulting services provided by third parties use of proceeds, future acquisitions, success of projects, growth and strategic plans. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with petroleum exploration and development stage exploration companies. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that the beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-K for the most recent fiscal year, our quarterly reports on Form 10-Q and other periodic reports filed from time-to-time with the Securities and Exchange Commission.
To find out more about American Petro-Hunter, Inc. (OTCBB: AAPH), visit our website at www.americanpetrohunter.com
American Petro-Hunter, Inc. Investor Relations: 1-888-521-7762 email@example.com